COVENTRY CORPORATION REPORTS SECOND QUARTER RESULTS; HEALTHCARE USA TRANSACTION COMPLETED.NASHVILLE, Tenn.--(BUSINESS WIRE)--Aug. 1, 1995--Coventry Corporation (Nasdaq/NM:CVTY) reported revenues and earnings for the second quarter and six months ended June 30, 1995. For the second quarter, revenues totaled $198.4 million, a 6.8% gain over the prior year's $185.8 million. Net earnings from operations, prior to merger costs, severance and other second quarter charges noted below, were $7.0 million, or $0.24 per share, compared with $7.7 million, or $0.27 per share, for the prior year. Net earnings, including merger costs, additional severance and other charges, were $2.6 million, or $0.09 per share, compared with $7.7 million, or $0.27 per share, for the prior year. For the first six months of 1995, revenues were $397.8 million, up 7.4% over prior year revenues of $370.6 million. Net earnings from operations, prior to merger costs, severance and other second quarter charges noted below, were $16.4 million, or $0.56 per share, compared with $14.7 million, or $0.50 per share, for the prior year. Net earnings, including merger costs, additional severance and other charges, were $12.0 million, or $0.41 per share, compared with $14.7 million, or $0.50 per share, in the year earlier period. The merger costs of $1.3 million, or $0.04 per share, relate to the costs associated with the HealthCare USA acquisition which was completed on July 28, 1995. Consideration for this transaction, which was accounted for as a pooling of interests Pooling of Interests An accounting method, used in mergers and acquisitions, where the balance sheet items of the two companies are simply added together. Notes: The opposite of pooling of interests is the purchase acquisition method. , was Coventry common stock valued at approximately $45 million. The Company also recorded severance and other charges of $3.1 million, tax effected, or $0.11 per share, primarily for severance and related costs associated with staff restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). in Pittsburgh and St. Louis. Included in these charges are accruals Accruals Accounts on a balance sheet that represent liabilities and non-cash-based assets used in accrual-based accounting. These accounts include, among many others, accounts payable, accounts receivable, goodwill, future tax liability and future interest expense. for settlement of certain Office of Personnel Management (OPM See Oracle Process Manufacturing. ) negotiations and additions to accruals for professional liability litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. . Also, as the Company previously announced, operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before were affected in the second quarter by higher utilization trends and slower membership growth in the Pittsburgh and St. Louis markets. During the quarter, the Company downsized by 148 employees to operate more cost-effectively in relation to the current membership. Philip Hertik, President and Chief Executive Officer of Coventry, said, "Although the medical utilization has had and will continue to have a short term effect on earnings, we believe appropriate corrective actions A corrective action is a change implemented to address a weakness identified in a management system. Normally corrective actions are instigated in response to a customer complaint, abnormal levels if internal nonconformity, nonconformities identified during an internal audit or have been initiated. We are restructuring and recontracting our provider networks and implementing more stringent utilization controls for outpatient services outpatient services Hospital-based services Managed care Medical and other services provided, to a nonadmitted Pt, by a hospital or other qualified facility–eg, mental health clinic, rural health clinic, mobile X-ray unit, free-standing dialysis unit Examples to improve our medical costs and utilization. The initial impact of these corrective cor·rec·tive adj. Counteracting or modifying what is malfunctioning, undesirable, or injurious. n. An agent that corrects. corrective, n efforts is not expected to be reflected until the fourth quarter of 1995." In closing, Mr. Hertik added, "We are pleased with our positioning for enrollment growth through government products and hub and spoke Any architecture that uses a central connecting point. It is the same as a star topology in a network. A network hub is hardware that functions as a central hub to all nodes. See hub and full mesh.  activities. With respect to the potential government-funded
markets, we expect to introduce a Medicare product into our St. Louis
and Pittsburgh markets by January 1996. We are encouraged by the
announcement that Medicare rates will increase an average of 10.1%
nationally in 1996. Further, our opportunity to access the Medicaid
market has been enhanced substantially by the acquisition of HealthCare
USA, which will enable us to aggressively expand this line of business,
not just in Florida, but in our existing markets as well."
Coventry Corporation, headquartered in Nashville, Tennessee “Nashville” redirects here. For other uses, see Nashville (disambiguation). Nashville is the capital and the second most populous city of the U.S. state of Tennessee, after Memphis. , is a managed health care company that provides a wide range of health benefits to a broad cross section of employer groups employer group Association of employers Managed care An entity with a current group benefits agreement in effect with a health plan to provide covered health care services to its employee-subscribers and eligible dependents. in Pennsylvania, Ohio, West Virginia West Virginia, E central state of the United States. It is bordered by Pennsylvania and Maryland (N), Virginia (E and S), and Kentucky and, across the Ohio R., Ohio (W). Facts and Figures Area, 24,181 sq mi (62,629 sq km). Pop. , Missouri, Illinois, Virginia and Florida. The Company operates from regional headquarters in Pittsburgh and Harrisburg, Pennsylvania This article is about the capital city of the Commonwealth of Pennsylvania. For other places named Harrisburg, see Harrisburg (disambiguation). Harrisburg is the capital of the Commonwealth of Pennsylvania, a state of the United States of America. ; St. Louis, Missouri; Richmond, Virginia Richmond IPA: [ɹɯʒmɐnɖ] is the capital of the Commonwealth of Virginia, in the United States. ; and Jacksonville, Florida “Jacksonville” redirects here. For other uses, see Jacksonville (disambiguation). Jacksonville is the largest city in the state of Florida and the county seat of Duval County. . -0-
COVENTRY CORPORATION
Unaudited Financial Highlights
(In thousands, except per share and membership data)
Three Months Ended Six Months Ended
June 30, June 30,
Percent Percent
1995 1994 Change 1995 1994 Change
Operating revenues $198,428 $185,782 6.8% $397,845 $370,563 7.4% Operating earnings $ 4,848 $14,039 (65.5%) $20,436 $ 27,282 (25.1%) Earnings before income taxes and minority interest $ 5,311 $14,652 (63.8%) $21,260 $ 28,207 (24.6%) Net earnings $ 2,584 $ 7,726 (66.6%) $11,994 $ 14,653 (18.1%) Earnings per share $ 0.09 $ 0.27 (66.7%) $ 0.41 $ 0.50 (18.0%) Earnings per share excluding merger costs $ 0.13 $ 0.27 (51.9%) $ 0.45 $ 0.50 (10.0%) Weighted average common and common equivalent shares outstanding 29,329 29,099 0.8% 29,478 29,143 1.1%
June 30,
Percent
1995 1994 Change
Total enrollment by market:
Western Pennsylvania 248,621 230,063 8.1%
Central Pennsylvania 150,009 130,999 14.5%
St. Louis 138,845 133,651 3.9%
Richmond 61,523 43,307 42.1%
Jacksonville 27,094 19,808 36.8%
Total 626,092 557,828 12.2%
Risk enrollment by market:
Western Pennsylvania 233,397 222,621 4.8%
Central Pennsylvania 119,608 97,454 22.7%
St. Louis 126,976 122,464 3.7%
Richmond 51,245 43,307 18.3%
Jacksonville 27,094 19,808 36.8%
558,320 505,654 10.4%
Non-risk enrollment 67,772 52,174 29.9%
Total 626,092 557,828 12.2%
CONTACT: Coventry Corporation, Nashville Richard H. Jones, 615/391-2440 |
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